Sydney Morning Herald State Political Editor

Newly commissioned NSW Premier Mike Baird has foreshadowed changes to the way lobbyists operate in the state, declaring people are ''incredibly disappointed and shocked'' at what has unfolded before the Independent Commission Against Corruption in recent weeks.

An hour after being elected unopposed by the Liberals party room on Thursday following the dramatic resignation of his predecessor Barry O'Farrell the day before, Mr Baird conceded there were community concerns about lobbyists, fund-raising and political donations.

Mr O'Farrell resigned after giving misleading evidence under oath to the ICAC about the gift of a $3000 bottle of Penfolds Grange from Liberal fund-raiser and former lobbyist Nick Di Girolamo shortly after the 2011 election.

The commission is investigating Mr Di Girolamo's role in an infrastructure company, Australian Water Holdings, which has links to the family of corrupt former Labor powerbroker Eddie Obeid.

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The inquiry has heard evidence Mr Di Girolamo lobbied Mr O'Farrell both in opposition and in government in an ultimately unsuccessful bid to secure support for a public private partnership.

ICAC has previously recommended tightening the rules for lobbyists in NSW, including that companies and associates lobbying ministers be registered and for details of meetings to be made public.

Mr O'Farrell resigned despite not being accused of corrupt conduct, prompting criticism of ICAC's role his downfall.

He was challenged on how well he knew Mr Di Girolamo - as was Prime Minister Tony Abbott. Mr Baird was involved as shareholding minister in his appointment to the board of State Water Corporation in mid-2012.

Mr Baird said he was not a friend of Mr Di Girolamo. ''Appointments are signed up to by the full cabinet,'' he said. ''In hindsight, should that have been done? No.''

Mr Baird was also joined by the newly elected deputy leader of the Liberal Party, Gladys Berejiklian, who was also elected unopposed.

Mr Baird said he had spoken to Mr O'Farrell who was ''in incredible spirits despite events'' and indicated he wished to ''continue in his role as a local member''.

One question appeared to stun Mr Baird, a committed Christian who is socially conservative.

''Do you still believe homosexuality is a lifestyle decision?'' he was asked. After a pause he responded: ''That's not a question I expected at this press conference.''